Coalhurst council reviews CEIP report

Posted on January 11, 2024 by Sunny South News

By Nikki Jamieson
Sunny South News

Coalhurst council received an update on a provincial green energy program they were looking into.

During a November 2023 meeting, Coalhurst council had directed administration to draft a bylaw in accordance with the Clean Energy Improvement Program (CEIP) for their Jan. 2, 2024, council meeting, and provide a report outlining any impact the program may have on the municipality.

Municipalities that wish to participate in CEIP would first have to pass a bylaw allowing residents to participate in the program. If passed, the bylaw would allow the town to participate in the province’s CEIP, a Property Assessed Clean Energy (PACE)-style program that aims to help people make energy efficient upgrades to their properties without having to put money down, with the upgrades’ costs recovered through their property taxes.

According to the report presented during council’s Jan. 2 meeting, Alberta Municipalities would act as the Program Administrator for CEIP and work with the municipality in drafting the bylaw to ensure accuracy and regulation compliance.

However, while initially administration had believed that the Town would act as a middleman in this arrangement, with the funds being provided by the province to the property owner, and the Town collecting the payments back through property taxes and passing them on to the province, they were mistaken. It is the Town itself who funds the CEIP.

The town would work with the administrator in creating the specific municipal program and set up internal systems. Once the program is running, the town would be responsible for verifying applicants meet the program requirements, preparing and executing financing agreements, recording and collecting the Clean Energy Improvement Tax, providing funds for contractor payments, establishing and managing internal finance processes and marketing the program with support from the administrator.

If the Town does move forward with doing the program, they can fund it a number of ways.

If they go the debenture route, borrowing funds for the programs would not count against the municipality’s debt limit or debt service limit, and there would be a fixed interest rate for term of loan. However, they would have to make repayments according to the repayment schedule, which could cause problems if there is little to no uptake.

“We don’t know the uptake on the programming for this, so if we were to borrow, let’s say a $1 million, we have to start paying that back right away, like you would have if you purchased a car, you have to start the payment right back,” said Mike Passey, director of corporate services for the Town. “If there’s no uptake, then the Town would have to start making those payments without having anyone to fund it.”

Using a Line of Credit would allow the Town to borrow money as projects arise, but variable interest rates may create more work for Town Administration to ensure the funds collected equal the funds paid out, and a property owners’ payments could fluctuate depending on variable interest rates.

Using funds from existing reserves would mean the Town is using its own money and can set their own interest rate for lending, but the funds would be unavailable for other uses until they are repaid.

Passey said they could “blend” the financing source if the CEIP Tax/Borrowing Bylaw enables it.

“It puts the municipality in the position of being the bank essentially, without the financial resources,” said Shawn Patience, CAO for the Town. “So somehow we’d have to come up with the administering, contractors, et cetera, et cetera. It’s not as sleek and quick as it was first anticipated.”

Coun. Heather Caldwell noted that that was her initial take on the program, that the town would “take the risk and doing all the work, and yet we can’t set it to how we wish it would be”. It made her nervous that they would have to set the program as per someone else’s instructions, who doesn’t have a stake in it.

When asked what Alberta Municipalities role is in CEIP, Passey said they have a list of contractors, and the Town would send them funds for whatever projects were being done, and Alberta Municipalities would then take those funds and pay the contractors. 

Coun. Deborah Florence noted while the program was “interesting”, she thought it was quite “onerous” for administration, and there were other programs homeowners could take advantage of for funding green improvements.

Mayor Lyndsay Montina asked if the Town has been approached by anyone interested in the program. Coun. Jesse Potrie said he had a resident approach him, and Caldwell had a resident approach her about other similar programs that were being run through municipalities.

No motion was made at the end of the discussion.